July 7, 2014

One of the biggest policy failures Congress has made this year was the inability to extend long-term unemployment benefits. By killing the Senate deal to renew benefits for five months, House Republicans have denied a much-needed source of income to more than a million Americans. But after the June jobs report came out last Thursday, a number of Republicans declared their lack-of-action on UI a success. A quick examination of the evidence shows how wrong they are.

Long-term unemployment dropped by nearly 300,000 people in June. Since March, it has fallen by nearly 700,000. Conservatives have argued that this drop is the result of the long-term unemployed accepting work now that they cannot receive UI checks. At the Huffington Post, Arthur Delaney rounded up some of these pronouncements: On Fox News, conservative columnist Charles Krauthammer declared, “The debate on that extension is over, and the conservatives were right.” Matt Wolking, a spokesman for House Speaker John Boehner, wrote, "More unemployment checks won’t create less unemployment. In fact, the evidence suggests they create more." Wolking links to an analysis from the House Ways and Means Committee that finds that job growth accelerated in the first four months of the year.

First, we don’t actually know why long-term unemployment is falling. They could be finding jobs—or they could be dropping out of the labor force altogether. The former is good news. The latter is not.

Second, job growth could have accelerated for a number of reasons, including a stronger economy. In fact, the Congressional Budget Office projected that the refusal to extend unemployment insurance would cost jobs. The only way for the end of federal UI to boost job growth would be if it caused the long-term unemployed to accept jobs at a higher rate. As I noted above, we don’t know if that’s happening, but on top of that, long-term unemployment isn’t even falling at a faster rate. In fact, the ranks of the long-term unemployed have been falling at a consistent pace for years:

Source: Bureau of Labor Statistics

In other words, the evidence suggests that the end of unemployment benefits had little effect on long-term unemployment. That's the exact opposite of what Krauthammer and Wolking declared.